Cornell Lawsuit Over The Future Use Of A Fraternity House Will Continue After All 

Timothy M. Burke, Fraternal Law Partners, tburke@manleyburke.com

As reported in the January 2023 issue of Fraternal Law, the New York Alpha Chapter of Phi Kappa Psi Association, Inc. (the “Association” or the “Chapter”) was embroiled in litigation with Cornell University over the future use of the Gables, the property that once served as the Phi Kappa Psi Chapter house at Cornell.[1] While Cornell owns the real estate on which the Chapter house was built, pursuant to an Agreement, the Association had the right to occupy and possess the property “in perpetuity,” contingent upon good behavior. The Agreement also stipulated that if the Association were suspended or terminated, the property “shall be reserved for reorganization” of the Association. Relying on these terms, the Association had invested an estimated $10 million (present value) into the Gables.

The controversy arose after a Cornell student, Antonio Tsialas, died as a result of falling from a cliff after leaving a party at the Chapter. Cornell, perhaps as part of a settlement with Antonio’s family, “permanently” revoked the Association’s recognition as a campus fraternity. The Association, in turn, attempted to exercise its rights to determine who would occupy the Gables until the time when it could return to campus as a fraternity. It planned to use the Gables as student veteran housing. Cornell, however, had other ideas and apparently acted to devote the Gables to use by another campus fraternity.

In December 2022, the Association sued Cornell over the perceived breach of the Agreement. Cornell responded, filing a motion to dismiss. The trial court granted that motion, finding that the Association’s claim was time barred, reasoning that “the ‘true nature’ of plaintiff’s [breach of contract claim] is a challenge to defendant’s disciplinary decision and, therefore, it is subject to [a] four-month statute of limitations.”[2] The trial court further concluded that since the Chapter could never return to campus, Cornell was not obligated to reserve the Gables for the Association’s future use.

But the Association just got another bite at the apple. On December 5, 2024, the Appellate Division of the New York Supreme Court overruled the trial court’s dismissal, breathing new life into the Association’s case. [3] The Appellate Court observed that:

In the future, a different administration of defendant might allow for plaintiff’s return, where the Chapter will have new members unaffiliated with previous members. This concern is distinct from trying to retain short-term status by challenging defendant’s disciplinary decision. Since the cause of action to recover damages for breach of contract specifically relates to nonacademic matters, for which recovery may be sought in a plenary action, [the Trial] Court erred in dismissing the first cause of action as time-barred.[4]

The Appellate Court also noted there was a dispute between the parties as to whether the Agreement had language agreed to by both parties that included the termination provision. The Court found that, at a minimum, ambiguity exists and that where ambiguity is present, a motion to dismiss must be denied allowing the parties to engage in discovery. It noted that the termination provision of the Agreement “seemingly conflicts” with the “in perpetuity” provision, and therefore the “plaintiff is entitled to discovery and the opportunity to present extrinsic evidence as to the parties’ intent.”[5]

With the appellate court’s decision, this litigation is far from over and will return to the trial court first for discovery, additional motion practice, and perhaps a trial. While the outcome remains uncertain, the Association now has a renewed opportunity to argue its position—and perhaps secure the future use of the Gables.

[1] See Tim Burke, Cornell University vs. New York Chapter of Phi Kappa Psi Assoc., 178 Fraternal L. 1, 8 (Jan. 2023).

[2] N.Y. Alpha of Phi Kappa Psi Assn., Inc. v. Cornell Univ., 2024 N.Y. App. Div. LEXIS 6487 (App. Div. 3rd Dept. Dec. 5, 2024), * 4.

[3] Id.

[4] Id. at *5–6.

[5] Id. at *7.